Google sued over advertising fees

SAN FRANCISCO (Reuters) - Google Inc. is being sued over accusations that it overcharged advertisers that use the Web search giant's paid search advertising program, which accounts for the vast majority of Google's revenue.

The proposed class-action suit, filed August 3 in State Superior Court in Santa Clara, Calif., accuses Google of charging in excess of advertisers' "daily budgets," under which Google allows an advertiser to limit how much it spends each day.

Lawyers for the proposed suit were not available for comment. The suit seeks unspecified monetary damages and was filed on behalf of CLRB Hanson Industries LLC in Minnesota and other advertisers.

Google said the allegations had no basis.

"The claims are without merit and we will defend against [them] vigorously," said Google spokesman Steve Langdon.

The suit claims Google "engaged in conduct which injured members of the general public, including the plaintiffs" and said it was "impossible...to determine the exact amount of the injury without a detailed review of Google's books and records."

It also accuses Google, based in Mountain View, Calif., of disputing complaints from advertisers regarding the company's pricing practices and for not reimbursing what the suit called "unlawful" charges.

Google, the biggest player in the global Internet advertising market, gets the vast majority of its revenue from Web search advertising.

Shares of Google (Research) closed down $1.10 to $291.25 on Nasdaq. The stock is 7.2 percent below its record close of $313.94 on July 21.

With this class action litigation, MSFT and YHOO going after the same honey pot plus the recent IPO of BIDU, has GOOG seen its best days in terms of price? or do you think the maket will just shrug it off?

The proposed class-action suit, filed August 3 in State Superior Court in Santa Clara, Calif., accuses Google of charging in excess of advertisers' "daily budgets," under which Google allows an advertiser to limit how much it spends each day.

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From Google's Help Center:"On any single day, the AdWords system may deliver up to 20% more ads than your daily budget calls for. This helps make up for other days in which your daily budget is not reached. However, you'll never be charged more than your average daily budget over the course of a month. For example: if your daily budget is $10 and the month has 30 days, you might be charged up to $12 on any single day but your monthly charges will never exceed $300."